New indictment charges 2 more in Seven Falls fiasco

Published: Friday, December 7, 2012 at 11:30 a.m.

Last Modified: Friday, December 7, 2012 at 11:30 a.m.

A federal grand jury has indicted two additional defendants in what prosecutors say was a scheme to fraudulently obtain bank loans to finance the Seven Falls development just south of Etowah.

Certified Public Accountant George M. Gabler and Certified Real Estate Appraiser Aaron Ollis have been added to a list of defendants in the case in a superseding indictment filed Wednesday in U.S. District Court in Asheville.

Ollis “facilitated the defendants’ fraudulent schemes and misapplication of bank funds by providing inflated appraisal reports which included false statements, and willfully omitted material facts designed to inflate the value of Seven Falls lots and mislead anyone who might rely on his appraisal reports,” according to the indictment.

Ollis has been charged with conspiracy to defraud the United States, bank fraud and misapplication of bank funds.

Gabler “promoted Seven Falls to investors and invested, borrowed or guaranteed millions of dollars in Seven Falls, personally and through entities that he controlled,” according to the indictment.

Gabler has been charged with bank fraud.

Named as defendants in the superseding indictment are Seven Falls’ developer Keith Vinson; real estate investor and private money lender Avery Ted “Buck” Cashion III of Lake Lure; real estate and private money lender Raymond “Ray” Chapman of Brevard; former president of Pisgah Community Bank Thomas “Ted” Durham of Fletcher; Gabler and Ollis. Charges have been dropped against Cashion’s wife, Joan Lusk Cashion, formerly named on the indictment in April.

Vinson faces federal charges of wire fraud conspiracy, three counts of wire fraud, misapplication of bank funds, bank fraud and money laundering. He was granted a public defender in May.

Cashion, Chapman and Durham have been charged with wire fraud, money laundering, engaging in monetary transactions, misapplication of bank funds, bank fraud and conspiracy to defraud the United States.

All defendants are scheduled to appear before Magistrate Judge Dennis Howell in U.S. District Court on the new indictments at 10 a.m. on Dec. 18.

Consumers purchased lots in excess of $200,000 for a stake in the “promised land” of 900 mountainside homes and a championship golf course even Arnold Palmer would approve. The 1,400-acre Seven Falls golf course community ended in bankruptcy in 2009, however. Work on the site had ceased by early 2010, according to County Planning Director Anthony Starr.

Now parts of the golf course are rutted with deep ravines and sprouting with corn. Many of the homesteads have fallen back into the hands of banks.

In addition to federal charges, Vinson faces several lawsuits filed by furious contractors and lot purchasers.

In the 34-page document filed Wednesday, which replaces the indictment filed in April, Vinson and his co-defendants are said to have “devised and executed various schemes to defraud federally insured banks and others in order to obtain more than $23 million they needed to forestall the failure of their luxury residential development and golf resort ... These defendants were aided and abetted by each other and, in some instances, by the officers of Pisgah Community Bank and the Bank of Asheville — two financial institutions which had particularly heavy concentrations of Seven Falls-related loans.”

Durham and former Bank of Asheville President George Gordon “Buddy” Greenwood “conspired to conceal the risks posed by Seven Falls-related loans from their shareholders, auditors and regulators,” according to the indictment.

Greenwood was found guilty of bank fraud charges and was sentenced in May to four years in federal prison.

<p>A federal grand jury has indicted two additional defendants in what prosecutors say was a scheme to fraudulently obtain bank loans to finance the Seven Falls development just south of Etowah.</p><p>Certified Public Accountant George M. Gabler and Certified Real Estate Appraiser Aaron Ollis have been added to a list of defendants in the case in a superseding indictment filed Wednesday in U.S. District Court in Asheville. </p><p>Ollis “facilitated the defendants' fraudulent schemes and misapplication of bank funds by providing inflated appraisal reports which included false statements, and willfully omitted material facts designed to inflate the value of Seven Falls lots and mislead anyone who might rely on his appraisal reports,” according to the indictment.</p><p>Ollis has been charged with conspiracy to defraud the United States, bank fraud and misapplication of bank funds.</p><p>Gabler “promoted Seven Falls to investors and invested, borrowed or guaranteed millions of dollars in Seven Falls, personally and through entities that he controlled,” according to the indictment. </p><p>Gabler has been charged with bank fraud.</p><p>Named as defendants in the superseding indictment are Seven Falls' developer Keith Vinson; real estate investor and private money lender Avery Ted “Buck” Cashion III of Lake Lure; real estate and private money lender Raymond “Ray” Chapman of Brevard; former president of Pisgah Community Bank Thomas “Ted” Durham of Fletcher; Gabler and Ollis. Charges have been dropped against Cashion's wife, Joan Lusk Cashion, formerly named on the indictment in April.</p><p>Vinson faces federal charges of wire fraud conspiracy, three counts of wire fraud, misapplication of bank funds, bank fraud and money laundering. He was granted a public defender in May.</p><p>Cashion, Chapman and Durham have been charged with wire fraud, money laundering, engaging in monetary transactions, misapplication of bank funds, bank fraud and conspiracy to defraud the United States.</p><p>All defendants are scheduled to appear before Magistrate Judge Dennis Howell in U.S. District Court on the new indictments at 10 a.m. on Dec. 18.</p><p>Consumers purchased lots in excess of $200,000 for a stake in the “promised land” of 900 mountainside homes and a championship golf course even Arnold Palmer would approve. The 1,400-acre Seven Falls golf course community ended in bankruptcy in 2009, however. Work on the site had ceased by early 2010, according to County Planning Director Anthony Starr.</p><p>Now parts of the golf course are rutted with deep ravines and sprouting with corn. Many of the homesteads have fallen back into the hands of banks. </p><p>In addition to federal charges, Vinson faces several lawsuits filed by furious contractors and lot purchasers.</p><p>In the 34-page document filed Wednesday, which replaces the indictment filed in April, Vinson and his co-defendants are said to have “devised and executed various schemes to defraud federally insured banks and others in order to obtain more than $23 million they needed to forestall the failure of their luxury residential development and golf resort ... These defendants were aided and abetted by each other and, in some instances, by the officers of Pisgah Community Bank and the Bank of Asheville — two financial institutions which had particularly heavy concentrations of Seven Falls-related loans.”</p><p>Durham and former Bank of Asheville President George Gordon “Buddy” Greenwood “conspired to conceal the risks posed by Seven Falls-related loans from their shareholders, auditors and regulators,” according to the indictment.</p><p>Greenwood was found guilty of bank fraud charges and was sentenced in May to four years in federal prison.</p><p>Reach Weaver at emily.weaver@blueridgenow.com or 828-694-7867.</p>